Geely when they took over Volvo from Ford, they handed Volvo Sweden financial security, but not automotive resources. No synergies existed between the Chinese automaker’s unsophisticated lineup and Volvo’s premium range at the time. So a financial plan was thrashed out in which Volvo would spend USD11 billion on a new platform, a raft of new models and a new engine range.
Geely’s chairman, Li Shufu, has referred to himself in the past as the Henry Ford of China. Li is admired by those who work for him for not meddling too much.
“To me he’s a guy who says, ‘If I’m going to buy a company with expertise, why am I going to tell them what to do?’ ” Chris Gubbey, CEO of the Geely-owned London Taxi Co., said. Geely isn’t state-owned, unlike many Chinese automotive firms, and that makes it more agile, Gubbey believes. Geely Chairman Li Shufu has given Volvo leeway to manage its own affairs.
It sounded like a lot, but spread out over so many models it really wasn’t. Savings would have to be made particularly because this wasn’t a gift from Geely. Volvo is paying back loans made by the China Development Bank, has recently tapped the bond markets and has sold shares worth USD532 million to Swedish institutional investors. Samuelsson said a long-rumored public offering of stock would be “an option” in the future.
